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Village Capital 3.0: Democratizing Entrepreneurship
Loutskina, Elena; Baird, Ross Case F-1741 / Published January 26, 2017 / 17 pages.
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Product Overview

Venture capital (VC) financing of social entrepreneurs in emerging markets is challenging, mainly because of excessive due diligence costs per unit of investment capital deployed and long harvesting periods. The desire to provide early-stage firms across the globe with access to finance led the two principal members of Village Capital (VilCap) to an innovative fund structure, due diligence, and screening mechanisms that allowed the firm to democratize start-up access to capital. With the new financial structures in place, VilCap deployed 62 start-ups and $6 million in capital with only 2% attrition rate in its portfolio. Six years after its inception, VilCap's two principals are critically assessing the infrastructure necessary to effectively raise and deploy a new and much larger fund. This case is taught at the Darden School of Business in an "Impact Investing" class, and has been used effectively in a course module covering VC in impact-investing spaces and venture philanthropy.


Learning Objectives

? Understand the challenges of VC financing in the impact-investing space. ? Examine a new peer-to-peer screening and due diligence model of VC investing. ? Evaluate the effectiveness of partnering with an NGO to efficiently deploy capital in emerging markets. ? Evaluate innovating the economic model for small VC investments.

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  • Overview

    Venture capital (VC) financing of social entrepreneurs in emerging markets is challenging, mainly because of excessive due diligence costs per unit of investment capital deployed and long harvesting periods. The desire to provide early-stage firms across the globe with access to finance led the two principal members of Village Capital (VilCap) to an innovative fund structure, due diligence, and screening mechanisms that allowed the firm to democratize start-up access to capital. With the new financial structures in place, VilCap deployed 62 start-ups and $6 million in capital with only 2% attrition rate in its portfolio. Six years after its inception, VilCap's two principals are critically assessing the infrastructure necessary to effectively raise and deploy a new and much larger fund. This case is taught at the Darden School of Business in an "Impact Investing" class, and has been used effectively in a course module covering VC in impact-investing spaces and venture philanthropy.

  • Learning Objectives

    Learning Objectives

    ? Understand the challenges of VC financing in the impact-investing space. ? Examine a new peer-to-peer screening and due diligence model of VC investing. ? Evaluate the effectiveness of partnering with an NGO to efficiently deploy capital in emerging markets. ? Evaluate innovating the economic model for small VC investments.